So they have this property tax owed information, but not older tax liens, so I'm confused or uncertain.  

I would refinance it in 12-24 months and transition it into a investment for tax purposes but that’s up to you and your family.

Of course, if it's that easy of an answer I probably should have been able to find the answer on my own and should probably be charged my stupid/lazy tax for bothering him with it!

If you have access access to an 'Asset Protection Attorney" (Local), this is a good question to ask him/her.And also be sure to ask your tax person about the cost for maintaining either structure (accounting, tax, quarterly filings, etc...).Everyone always wants 'The Best", but (for instance) a Rolls Royce is considered one of the best, and it COSTS a lot more then a "Used Camrey".Getting expert advice on your personal situation is always best, vs just winging it based on someones response to an internet post.That being said, a Living Trust can own an LLC, but if that setup triggers an added tax return or two, IRS State and Local ($$$) is it the best choice.Which cuts down a tree better; a chainsaw, or a beaver?

I am looking for  referrals for CPA’s who have an expert knowledge of tax law and work  proactively to help clients leverage the tax system to meet their goals.

Is sales tax registration required?

One way or another, you will want to sell within 3 years after moving out so you do not lose the tax free gain on sale (up to 250k tax free gains for single and 500k for married).

The current rental income is $5,300/month, while our mortgage is $1,500/month, property tax is $600/month, property management costs $200/month, and maintenance expenses are currently unknown.We’ve utilized a HELOC from this property, amounting to $300,000, for renovating the basement and investing in a preconstruction condo and another property in a different city.

You should do something like this in cooperation with your accountant because you don't want to mess up your taxes and have to pay for something you shouldn't be paying for. 

Find out what is most important to your partner - is it tax benefits, guaranteed return,  split of the profits...